Question

The following data represent the asking price of a simple random sample of homes for sale. Construct a 99% confidence interval with and without the outlier included. Comment on the effect the outlier has on the confidence interval.

Here is the information: $162,000 $279,900 $219,900 $143,000 $205,800 $225,000 $459,900 $190,000 $187,500 $276,900 $147,800 $264,900

A) Construct a 99% confidence interval with the outlier included: ($_____ , $ _____)

B) Construct a 99% confidence interval with the outlier removed: ($_____ , $ _____)

Answer 1

99% = mean ± 2.575 SEm

SEm = SD/√n

Find the mean first = sum of scores/number of scores (n)

Subtract each of the scores from the mean and square each difference. Find the sum of these squares. Divide that by the number of scores to get variance.

Standard deviation = square root of variance

I'll let you do the calculations.

Answer 2

1. A
2. A
3. C
4. B
5. C
6. D
7. B
8. C
9. D
10. C
11. C
12. B
13. C
14. C
15. D
16. B
17. B
18. C
19. C
20. A